• Section 138 - stop payment of cheque for not joining the organization

Sir, I gave an interview in a organization where they asked me to sign 3 years of Bond and took Cheque of 30% of my annual offered salary. I signed the same and issued a cheque without date as I was in need of the job. 

In the offer letter, a line was mentioned, if you didn't join the organization, then also you are liable to pay the amount. Later on I realized that I am joining a organization which is signing a bond which is against the law (Bonded Labor System (abolition) Act, so I responded HR via mail well in advance (20 days before my joining), that I am not able to join the organization and they should search for some other candidate.

After 2 months, one of the Advocate send me a Legal Notice of section 138 for Stop Payment of cheque. Please suggest, what to do next. Hoping for early response. Thanks in advance.
Asked 1 year ago in Civil Law from New Delhi, Delhi

You should give a befitting reply to legal notice received by you stating that you are not liable to make any payments to the company and search bonds cannot be enforced as they are void as per the Bonded Labour Abolition (System) Act and Section 27 of the Indian Contract Act.

After receiving the reply to your advocate stating all such points, then in all likelihood, they wouldn't proceed to file a case against you.

Siddharth Jain
Advocate, New Delhi
4785 Answers
52 Consultations

5.0 on 5.0

Dear Client,

Notice is for demand of amount, failure to do so in 15 days, case will file in court within one month.

Well, case u/s 138 files for recovery of legally enforceable debt and the amount which is demanded via notice is out of the ambit/definition of debt.

Reply to noitce on this note and intimation for filling criminal case for misusing issued cheque.

Yogendra Singh Rajawat
Advocate, Jaipur
13251 Answers
18 Consultations

4.6 on 5.0

You have to reply to the legal notice sent by them and clear your standing with further stating as to how they are misusing the law in order to harass people. Sometimes these companies send empty threats in order to exploit people. You should send a response through an advocate.

No the advocate's name will not be included and you can name the director.

Yes payment stopped does attract criminal liability, however it should be for a 'legally enforceable debt', which is missing in your case and hence the offence under section 138 does not arise.

Shailesh Poddar
Advocate, Delhi
48 Answers

5.0 on 5.0

Please let me first see what your agreement was?

Reply of notice can be from you too.

Stop payment attracts Sec 138

Anand Shukla
Advocate, Delhi
475 Answers
12 Consultations

4.9 on 5.0

you must contact a lawyer and reply to legal notice

2) if you have signed the bond that you are liable to pay amount and have issued cheque on dishonour of cheque complaint would be filed against you under section 138 NI

Ajay Sethi
Advocate, Mumbai
67030 Answers
4046 Consultations

5.0 on 5.0

you need to contact local lawyer and reply to legal notice

Ajay Sethi
Advocate, Mumbai
67030 Answers
4046 Consultations

5.0 on 5.0

Firslty, Sir, let me tell you that now it’s been the practice of the company to harass the employee who is not even joined them.

Secondly, when someone gives any cheque it means that the person has taken something, and there is a liability to pay back the same.

Thirdly, in your case, you neither owe any liability nor was bound to pay anything to them.

Fourthly, I advice you to please give reply to that stating everthing that you have gone through otherwise they may say at the time of filing the case that you deliberately didn’t not respond to their legal notice.

Fifthly, if they Stil file case then you have to be there otherwise non bailable warrant may be issued against you.

Sanjay Baniwal
Advocate, South Delhi
4895 Answers
11 Consultations

5.0 on 5.0

You are not guilty of any offence under sec 138 NIA. You didn't issue the cheque against any liability. Even if you had joined and breached the condition of bond , you wouldn't be liable to make payment on cheque. The liability , which would be damages in this case, has to be ascertained before it can be fastened on you. Reply to the notice you hv received. If the company files a complaint and magistrate erroneously summons you, you have to face trial on merits.

H. S. Thukral
Advocate, New Delhi
586 Answers
195 Consultations

5.0 on 5.0

See since there is no liability or debt for which the cheque was issued the company will not able to prove same before the court as the cheque cannot be taken for the purpose of security in the employment.

So a reply to the legal notice along with all the mail communication with HR should be sent back within stipulated time.

Take help of lawyer to draft a strong reply.

Shubham Jhajharia
Advocate, Ahmedabad
19398 Answers
76 Consultations

5.0 on 5.0

There is need as on failure the company shall file a private complaint under 138 NI act with the magistrate and reason being you shall have to face the court and prove in court there allegations.

You should engage an advocate so that proper notice reply can given.

You can respond to the advocate acting behalf of the company.

You can respond that the cheque was taken as security as bond for employment it was not given against any liability.

Shubham Jhajharia
Advocate, Ahmedabad
19398 Answers
76 Consultations

5.0 on 5.0

Hello, you are liable to commit an offence under section 138 NI act. You have two ways to get out of this either pay the complete cheque amount to the cheque holder or contest the case in the court of law. You can call for the detailed discussion.

Akash Gupta
Advocate, Gurgaon
66 Answers
2 Consultations

4.8 on 5.0

Hi, they kept the cheque in advance as a security and as per Supreme Court security cheque does not fall under the provisions of 138 NI Act .. However they can only file a civil suit for recovery .. It is advisable to send them a reply through an-advocate..you can contact me for legal assistance over the same .. Thank you

Hemant Chaudhary
Advocate, Gurgaon
4259 Answers
31 Consultations

4.9 on 5.0

For the purpose of section 138 NI Act , debt or other liabilities means a legally enforceable debt or other liability.

2. You have not joined the organization yet and they didn’t incur any expenses on your training etc. and hence such clause in offer letter is not legally binding on you.

3. Besides, stop payment of cheque will not attract provisions under sec 138.

4. Consult a lawyer of your area and send suitable reply to the legal notice served upon you.

Sushil Jha
Advocate, Patna
283 Answers
2 Consultations

5.0 on 5.0

You may try to negotiate with the company and settle the case. In case they are adamant, I suggest you to proceed with a response. It is necessary that the response is carefully drafted without any admissions etc. In case you have financial difficulties you may approach a pro bono lawyer.

V Ranjan
Advocate, Delhi
62 Answers

5.0 on 5.0

Bonded labour and employment agreement is different. Bonded labour is labour done for repayment of loan taken by person.

In your case it is an employment agreement and if you and the company both have signed it then it is a valid agreement. And as per the condition mentioned in it you are liable to pay that 30% amount as written in that agreement.

Abhilasha Wanmali
Advocate, Nagpur
897 Answers
1 Consultation

4.8 on 5.0

You should get the reply drafted by some advocate practicing in such matters which can be used in court later, if they go on to proceed legally against you.

You also have an option of sending the reply to the legal notice to the Advocate as well as the director yourself, but you have to keep in mind that the reply should contain all the legal points which can be taken in your defence and should be drafted in a manner as that is expected in courts.

Siddharth Jain
Advocate, New Delhi
4785 Answers
52 Consultations

5.0 on 5.0

The good idea will be to go for comprises and reply the notice professionally as you have taken money from the organisation and agreed to join by denial to join you breached the contract clause and liable to compensate the company.

Vimlesh Prasad Mishra
Advocate, Lucknow
5530 Answers
18 Consultations

4.9 on 5.0

You should reply him through your advocate... However, there. Will b chance that they can file criminal case against you.... After 15 days of receipt of notice ....

Nishant Bhadoria
Advocate, delhi
73 Answers

4.8 on 5.0

The service bond which you have signed will not be effective if you have not joined the employment.

The legal notice demanding the cheque amount is illegal and not maintainable in law.

However you may have to give a reply to the notice you received denying all the allegations.

Consult a local advocate and give a suitable reply.

T Kalaiselvan
Advocate, Vellore
56755 Answers
706 Consultations

5.0 on 5.0

I belongs to medium class family and don't want to proceed with such cases. Is there need to respond or it can be ignored? Should I send response by own or via some advocate.

It is your duty to give a suitable reply to the notice you received or else you will have no defence to defend your interest in the court of law when they decide to file a cheque bounce case.

* While responding back, should I include advocate or Director of the organization as well.

Your reply should be addressed to the advocate who has issued this legal notice and not to the director.

* Can someone help me with response please. Notice says "Payment stopped by the drawer" was done attracting liability under Section 138 of the Negotiable Instruments Act.

You have to discuss this with your advocate who will be issuing the reply suitably

T Kalaiselvan
Advocate, Vellore
56755 Answers
706 Consultations

5.0 on 5.0

No case against you is made out in the present matter and hence you cannot be prosecuted in a sec 138 NI case.

While responding back, reply that there could be no agreement in restraint of trade or profession and hence the service bond they coerced to sign you in not valid at first.

Vibhanshu Srivastava
Advocate, New Delhi
8573 Answers
134 Consultations

5.0 on 5.0

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